Publication 544 |
2001 Tax Year |
Transfers to Spouse
No gain or loss is recognized on a transfer of property from an
individual to (or in trust for the benefit of) a spouse, or a former
spouse if incident to divorce. This rule does not apply if the
recipient is a nonresident alien. Nor does it apply to a transfer in
trust to the extent the liabilities assumed and the liabilities on the
property are more than the property's adjusted basis.
Any transfer of property to a spouse or former spouse on which gain
or loss is not recognized is treated by the recipient as a gift and is
not considered a sale or exchange. The recipient's basis in the
property will be the same as the adjusted basis of the property to the
giver immediately before the transfer. This carryover basis rule
applies whether the adjusted basis of the transferred property is less
than, equal to, or greater than either its fair market value at the
time of transfer or any consideration paid by the recipient. This rule
applies for determining loss as well as gain. Any gain recognized on a
transfer in trust increases the basis.
For more information on transfers to a spouse, see Property
Settlements in Publication 504,
Divorced or Separated
Individuals.
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